Preparing Adjusting Entries, Financial Statements, and Closing Entries Fischer Card Shop is a small retail shop. Fischer's balance sheet at year-end 2018 is as follows. The following information details transactions and adjustments that occurred during 2019. 1. Sales total $145,850 in 2019; all sales were cash sales. 2. Inventory purchases total $76,200 in 2019; at December 31, 2019, inventory totals $14,500. Assume all purchases are made on account. 3. Accounts payable totals $4,100 at December 31, 2019. 4. Annual store rent for $24,000 and was paid on March 1, 2019, covering the next 12 months. The balance in prepaid rent at December 31, 2018, was the balance remaining from the advance rent payment in 2018. 5. Wages are paid every other week on Friday; during 2019, Fischer paid $12,500 cash for wages. At December 31, 2019, Fischer owed employees unpaid and unrecorded wages of $350. 6. Depreciation on equipment totals $1,700 in 2019.

Fischer Card Shop Balance Sheet December 31, 2018
Cash		$8,500	Accounts payable	$5,200
Inventories		12,000	Wages payable	100
Prepaid rent		3,800	Total current liabilities	5,300
Total current assets		24,300	Total equity (includes retained earnings)	23,500
Equipment	$7,500		Total liabilities and equity	$28,800
Less Accumulated depreciation	3,000
Equipment, net		4,500
Total assets		$28,800

(a) Prepare any necessary transaction entries for 2019 and adjusting entries at December 31, 2019, using the financial statement effects template. (b) Prepare any necessary transaction entries for 2019 and adjusting entries at December 31, 2019, in journal entry form. (c) Set up T-accounts, including beginning balances, and post the journal entries to those T-accounts on the appropriate line. After all transactions are recorded, compute the balance for each account in the appropriate column. (d) Prepare its income statement for 2019, and its balance sheet at December 31, 2019. (e) Prepare entries to close its temporary accounts in journal entry form and post the closing entries to the T-accounts above in part (c).

Note: Use negative signs with your answers, when appropriate.

		Balance Sheet									Income Statement
Transaction	Cash Asset	+	Noncash Assets	-	Contra Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital	Revenue	-	Expenses	=	Net Income
(1)	Answer	+	Answer	-	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
(2)	Answer	+	Answer	-	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
(3)	Answer	+	Answer	-	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
(4)	Answer	+	Answer	-	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
(5)	Answer	+	Answer	-	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
(6)	Answer	+	Answer	-	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer
Totals	Answer	+	Answer	-	Answer	=	Answer	+	Answer	+	Answer	Answer	-	Answer	=	Answer

Note: Do not use negative signs with any of your answers in the financial statements.

Fischer Card Shop Income Statement For the Year Ended December 31, 2019
Answer		Answer
Answer		Answer
Gross profit		Answer
Other expenses:
Rent Expense	Answer
Wages Expense	Answer
Depreciation Expense	Answer
Total other expenses		Answer
Net income		Answer

Fischer Card Shop Balance Sheet
	2019	2018
Assets:
Answer	Answer	Answer
Inventories	Answer	Answer
Prepaid rent	Answer	Answer
Total current assets	Answer	Answer
Answer	Answer	Answer
Less: Accumulated depreciation	Answer	Answer
Equipment, net	Answer	Answer
Total assets	Answer	Answer
Liabilities and equity:
Answer	Answer	Answer
Wages payable	Answer	Answer
Total liabilities	Answer	Answer
Total equity	Answer	Answer
Total liabilities and equity	Answer	Answer